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Tag Archives: USDJPY

After the majors ripped through the USD for a better part of January, I decided that it was about time the USD was oversold or too far beaten up, that it will shortly be time for a reversal.

I decided to buy three options as follows: –

USDJPY @ Call option expiring Friday, 2 March; strike at 108.83, premium at 1.10 and breakeven at 109.93

GBPUSD @ Put option expiring Friday, 2 March; strike 1.4313, premium of 150bps and breakeven at 1.4163

AUDUSD @ Put option expiring 16 February; strike 0.8113, premium of 72bps and breakeven at 0.8041

 

I sold off the GBPUSD put option at 1.3990 for a trading profit of 173bps.

I sold off the AUDUSD put option at 0.7790 for a trading profit of 251bps.

My USDJPY option is in trouble with spot at 107.15, the option may expire in early March worthless.  In any case, at the time when I bought the option I was prepared to part with the option monies, so it’s ok.

More importantly, these three option trades clearly demonstrate that we can’t win all the time.  What’s important is to follow and study the market, put our mark on it and wait for the market to come to us, however, we should always manage the risk parameters, if we don’t, chances of losing monies is imminent.

Now, I need to think about doing the reverse in the USDJPY, what do the rest of you think?

The USDJPY traded to a high of 113.29 on January 5th and then consolidated slightly lower, just below 113.00

On Monday, January 8th, USDJPY made another attempt to surge upwards, I decided to sell the option at 113.30.

A nice trading profit of 82yen!

During the last week and into the first week of January 2018, the US Dollar took a beating from all the majors.

On January 2nd when I opened up my computers and looked at the FX markets, the USDJPY looked yummy.

So I decided to buy a call option with the following details: –

Strike; 112.08

Premium; 40bps

Breakeven; 112.48

Expiry; Friday, January 12th

Let’s see what happens………..

I wasn’t sure whether the FOMC will turn out like the BOE last month, but there was sufficient buzz in the market to suggest that it could be a volatile event.

I decided not to stay up for the action but instead place some one day vanilla options with the following details:-

EURUSD Call Option; Spot 1.1762, Premium; 40bps, Breakeven; 1.1802

USDJPY Put Option; Spot 113.05, Premium; 38bps, Breakeven; 112.67

AUDUSD Call Option; Spot 0.7610, Premium; 21bps, Breakeven; 0.7631

Decided to square all the three options as follows: –

EURUSD at 1.1830 for a trading profit of 28bps

USDJPY at 112.61 for a trading profit of 0.6 yen

AUDUSD at 0.7634 for a trading profit of 3bps

This whole exercise turned a small profit of 36bps……………aarrgghh…………the whole event turned out to be a lacklustre event.

Ok, I am closing my books for 2017.

Will put up the final performance figures for 2017 shortly.

 

As it turned out, the USDJPY never did have any legs, so the option expired with a loss of 0.30yen.

I am deciding to take a small punt and buy a one day call option on the USDJPY with the following details: –

Strike: 113.20

Premium: .030

Breakeven: 113.50

Let’s see.

4H chart shows that the USDJPY is about touching the 200DMA.

At this point, the USDJPY can rebound back to 114 or meltdown to 111.70, how will it move.

Is this a buying or selling opportunity?!

Let’s see whether it can defend the support level of 113.20?!

I totally missed this………………SHOOT!

Looking at the Daily chart, I noticed that spot crossed the 200DMA on November 4th at 0.7697.

Does it mean that the AUD is heading for a protracted softening?

I have already bought two call options with breakeven averaging 0.7710………about 130 basis points away right now………….hmmmmm……..will I have a chance in the next three weeks for the AUDUSD to recover?

Let’s see.

Spot currently at 112.71.

Looks like my put option expiring tomorrow will expire worthless and will take a hit of 1.03yen, the cost of the option.

Oh well, we win some and we lose some…………that is FX trading………….

The 4H chart seems to indicate a potential triple top; 110.88 – 110.58 and currently 110.50.

I decided to execute a two week put option expiring Friday, Sept 29th with the following details: –

Strike: 110.50

Premium: 1.03

Breakeven: 109.47

Target: 108.20

Let’s see what happens?!